KLE improves March-quarter earnings despite road work woes

The customer headcount at the Usain Bolts Tracks and Records location in Kingston dropped 10 per cent but efficiency measures led to higher profit for KLE Group.

The customer headcount at the Usain Bolts Tracks and Records location in Kingston dropped 10 per cent but efficiency measures led to higher profit for KLE Group.

Gary Matalon CEO of KLE Group said that the road construction works on Constant Spring Road, created access issues for potential customers.

Matalon said the biggest impact is felt between 4 pm and 7 pm with the daytime segment of the after-work crowd.

“It used to be one of our busiest periods,” said Matalon. Overall at the Kingston location total guest count for January 1 to Mar. 31 this year, equalled 22,442 compared to 24,931 in the similar period of the previous year. Matalon said that the situation has improved somewhat since the start of 2019 with the advancement of the road works.

KLE is the part owner of Fran Jam, the franchise operator of Usain Bolt Tracks and Records.

Net profit for KLE Group grew to $198,000 when compared to a loss in the prior year of $1.9 million, while revenue declined by 3 per cent to $50 million in the March quarter 2019.

“The company has been resolute in managing the challenges and successfully has improved its cost management strategies which resulted in a higher gross profit margin and lower cost of sales when compared to the first quarter of 2018,” said Matalon.

KLE has had a positive trajectory over the past three years. The investment made in 2018 to establish new revenue streams came with costs, that are now placing the business in a position to reap the benefits in 2019 and beyond, Matalon added.

“In addition, the efforts made in 2018 to refinance the high-cost debt and reduce payables carrying from previous years has improved the company’s financial position and will enable us to capitalize on growth opportunities ahead,” he said.

In the meantime, KLE’s Bessa real estate villa project has contracted Rovenne Construction to build the pool villas which are set for completion in June 2020.

Shareholder equity totalled $114 million at March which was lower than $138 million in 2018.

“Evident in the first quarter of 2019 results is the fact that KLE Group is moving aggressively towards realising its potential and capitalising on the solid equity and value that has been created. As we continue our focus on the global markets, we will attack the opportunities in front of us and continue to seek out new ones on our mission to return shareholder value,” said Matalon.

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